Experts say the fuel marking process which will cost an extra 0.74 lek/litre will give a new boost to the market by further modernizing it
TIRANA, August 6 – Starting August 2013, for the first time in Albania, fuel will be marked at minor cost in an effort to strengthen monitoring of the market which has often abused consumers. The process will be carried out by Global Fluids International (GFI), a subsidiary of Canadian-based Eurocontrol which has won a 10-year contract to monitor the quality of fuel in Albania.
While the Association of Fuel Importers had initially described the concession as an unfair monopoly which risks a further increase in fuel prices, already at their historical record high levels, experts say the fuel marking process which will cost an extra 0.74 lek/litre will give a new boost to the market by further modernizing it.
“Now at only 0.74 lek/litre VAT included, the fuel market will breathe freely paving the way to its full modernization. Thus, big international companies which are currently on hold will enter,” says Dritan Spahiu, an energy expert. Elaborating on the misunderstanding between fuel marking and colouring, he said “marking consists in a secret formula which cannot be copied or falsified.” “Fuel marking involves an additional coulourless solution which is added to fuel and detected only by the company which produces it,” says Spahiu adding that the procedure will bring extra income to the state budget.
The project will cover the marking of all distilled fuels as well as the growing volume of Albanian exported crude oil. Eurocontrol estimates the annual increase in fuel tax collections will exceed 150 million Euros per year. Preparations and implementation of the project will commence promptly. GFI and its consortium partners will be responsible for the marking, inspecting and reporting to the Finance Ministry of Albania.
Speaking on behalf of the Albanian Government, Sali Berisha, the Prime Minister of Albania said earlier “This practice, which will be implemented through one of the best existing technologies, will prevent the abuse with harmful fuels adulteration, because the marking procedure will trace and find any kind of manipulation that can be done with fuels.
Bruce Rowlands, Eurocontrol Chairman and CEO said: “We are very pleased to have signed this comprehensive agreement with the Government of Albania and look forward to the positive impact our Petromark٠technology will deliver to the Country and its citizens.”
Abuses in fuel market
Abuse of quality and quantity are frequent in Albania’s fuel market. Early in 2011, a massive fraud scheme involving the gasoline and diesel distribution system, selling mixed premium products with inferior byproducts that could have damaged thousands of vehicles and cost consumers millions was unveiled. The probe led to charges for 13 men, both public officials and businesspeople.
With an annual turnover of 800-900 million Euros, the fuel market is one of the biggest industries in the country and has a direct impact on all sectors of the economy and citizen’s welfare. Data from fuels associations show some 160 companies operate in the wholesale oil and liquid gas market and another 1,000 in the retail market, making the market fully liberalized.
Fuel association against concession
The Association of Fuel Importers describes the concession as an unfair monopoly which risks a further increase in fuel prices, already at their historical record high levels. In a letter sent to the Competition Authority just before the Finance Ministry signed the contract with the winning consortium which was the only bidder in an international tender held last May, the Association demands the intervention of the Competition Authority to stop the monopoly in the fuel market.
“The tariff set for this service at 200 lek/1,000 litres initially introduced by the bidder has been finalized to 614 lek/1,000 litres of fuel, which means 6.5 Euros/1,000 litres. This tariff is even higher than the profit the companies themselves make,” says the Association. Introducing a list of institution monitoring the fuel market, such as the Directorates of Metrology, Patents and Trademarks, the Central Technical Inspectorate, the Association casts doubts on the necessity of the monopoly service at a time when the imported fuel is already marked by the foreign refineries under EU standards. Bardhi Sejdarasi, the Association’s coordinator says the fee in EU countries is around 0.1 USD per tonne of fuel.
In an international tender held on May 14, 2012 Austria-based Global Fluids International won a 10-year contract to monitor the quality of fuel in Albania. Global Fluids, which bid USD 4 million, had earlier been awarded a bonus by government because of making an unsolicited offer. The company will check fuel quality in customs points. The fuel quality is currently supervised by the Central Technical Inspectorate. The Socialist Party has also denounced the tender on fuel marking as abusive and lacking transparency.
